SriLankan Catering to double meals output with Rs. 250 m expansion

SriLankan Catering facility

• Current facility has capacity for only 14,000 meals but 23,000 produced 
• Further expansion to 40,000 meals through new investment 
• After Easter Sunday attacks meals served declined to 13,000 but back to 20,000 now 
• Facility likely to take two to three years to set up 
  
   

By Charumini de Silva

SriLankan Airlines Catering has received approval to invest Rs. 250 million, to boost their capacity and nearly double the number of meals served, on the back of improved demand from the travel sector. 

Recently, the Cabinet gave its nod for the national carrier’s profitable catering arm to go ahead with what would be its first major expansion, worth 

Rs. 250 million.

At present, SriLankan Catering serves 23,000 meals, and the expansion will give a capacity to increase the servings to 40,000. The current facility, set up in 2006, has a designed capacity of only 14,000 meals, but the national carrier has succeeded in boosting the number of meals served to 23,000. The highest-ever number was 28,000, but such demand cannot be met on a continuous basis sans an expansion, officials said.

“We are looking at two phases in this expansion project. The first phase will be to find out from the consultants whether by studying the current facility, work flow, and machinery, whether we can change some of these, and increase the production capacity in the interim.  The second phase will be to draw up plans on what type of expansion has to be done, to get our capacity up to 40,000 meals per day,” SriLankan Airlines Catering Ltd. CEO Lalith Withana told the Daily FT.

“Once we have the quotations and the reports, a decision will be taken how we will do the expansion. In order to do this, we still have to go through a proper tender procedure,” he added.

“We will take the expansion on a staggered basis, if it is more financially viable.  However, the management is of the view that if the Airport expansion gets done in another three years, then we should expect the meals to touch about 40,000 in the next 4-5 years.  We also believe that to do an expansion, it might take almost 2-3 years to complete, if we are to expand the present building,” Withana explained.

SriLankan Catering has seen a year on year growth of 7-8 % in passenger arrivals to the Bandaranaike International Airport. To date, SriLankan Catering has managed to boost the number of meals served via small changes to the facility at different times. Focus will be on continuous improvement to productivity, rather than adding new staff. 

“Wherever it can be justified, automation has to be done, benchmarking the best industry practices. We also have price pressure from customers,” Withana pointed out.

In the 2017/18 financial year, SriLankan Catering achieved a turnover of Rs. 9.7 billion, and a net profit of Rs. 5.6 billion.

However, with the Easter Sunday attacks, which resulted in airlines reducing their services, SriLankan Catering saw meals served decline from 24,000 per day to 13,000. However, the business has picked up in tandem with the rebound in tourist arrivals and restoration of flights in recent months, with the average number of meals per day returning to 20,000.

“If everything goes well, we expect to have a very good Financial Year 19/20, surpassing the 17/18 numbers,” the spokesman said.

Despite challenges, SriLankan Catering operations and quality are comparable to any best caterer in the world, officials believe. “While the need for the capacity will be addressed, the management will continue to provide a service that can match with any world standard.  We also expect to have a more efficient and a productive facility with this expansion,” he added.